LONDON, March 24 (Reuters) - The pan-European FTSEurofirst 300 index steadied near a recent 7-1/2-year high on Tuesday after falling earlier in the session, with forecast-beating economic data from Germany offsetting a poor reading of Chinese factory activity.

However, Lufthansa and Airbus were down 4.7 percent and 2.1 percent respectively after an Airbus operated by Lufthansa’s Germanwings budget airline crashed in France with all 148 on board feared dead. The European travel and leisure index fell 0.4 percent.

At 1114 GMT, the FTSEurofirst 300 index of top European shares was flat at 1,600.15 points after falling to 1,592.51 earlier in the session on the back of poor Chinese factory sector data. The index hit its highest since mid-2007 on Friday.

Resource-related shares fell, with the European sector index down 0.6 percent, and Rio Tinto and Glencore falling 0.6 percent and 0.9 percent respectively after March data showed activity in China’s factory sector dipped to an 11-month low.

But equities recovered after figures showed Germany’s private sector grew in March at its strongest rate since July and France’s private sector expanded for the second straight month, chiming with recent figures suggesting that economy is edging back to growth.

“Today’s data further shows that Europe is on the road to recovery and we are heading in the right direction. This is also supportive of our view that European earnings are going to deliver an upside surprise in 2015,” HSBC Global Research equity strategist Robert Parkes said.

“Companies are not cheap any more, but valuations are not yet stretched and we see more upside potential for European equities in the coming months,” he added.

Investors were also keeping a close eye on the euro, which traded at $1.0980 against the dollar on Tuesday, pulling further away from a 12-year trough of $1.0457 hit last week.

European stocks have rallied strongly since the start of the year -- with Germany’s DAX up 21 percent and on track to record its best quarter since late 2003 -- as global investors bet that a weaker euro would boost the region’s economy and corporate earnings.

“The environment for the euro zone is getting extremely positive: low interest rates, a weakening euro and falling commodity prices, coupled with strong action from the ECB,” said Christian Jimenez, fund manager and president of Diamant Bleu Gestion, in Paris.

“The only big risk seen in the medium term is the prospect of a rate hike by the Fed, but that’s mostly priced in already.”

Carrefour fell 1.1 percent after the supermarket chain sold 12.7 million treasury shares, representing 1.7 percent of its share capital, in a private placement. (Additional reporting by Blaise Robinson in Paris; Editing by Andrew Heavens)